ng Yu Asuncion vs.

CA
Sunday, August 24, 2014
Facts:
July 29, 1987: An amended Complaint for Specific Performance was filed by petiti
oners Ang Yu Asuncion and others against Bobby Cu Unjieng, Rose Cu Unjieng and J
ose Tan before RTC.
Petitioners (Ang Yu) alleged that:
- they are the tenants or lessees of residential and commercial spaces owned by
Bobby Unijeng and others located in Binondo, Manila (since 1935)
that on several occasions before October 9, 1986, the lessors informed the lesse
es (petitioners) that they are offering to sell the premises and are giving them
priority to acquire the same;
- that during the negotiations, Bobby Cu Unjieng offered a price of P6-million w
hile they made a counter offer of P5-million;
- that they wrote them on October 24, 1986 asking that they specify the terms an
d conditions of the offer to sell; that when plaintiffs did not receive any repl
y, they sent another letter dated January 28, 1987 with the same request;
The RTC found that Cu Unjiengs offer to sell was never accepted by the petitioner
s (Ang Yu) for the reason that they did not agree upon the terms and conditions
of the proposed sale, hence, there was no contract of sale at all. The Court of
Appeals affirmed the decision of the lower court. This decision was brought to t
he Supreme Court by petition for review on certiorari which subsequently denied
the appeal on May 6, 1991 for insufficiency in form and substance . (Referring to t
he first case filed by Ang Yu)
November 15, 1990: While the case was pending consideration by this Court, the C
u Unjieng spouses executed a Deed of Sale transferring the subject petitioner to
petitioner Buen Realty and Development Corporation.
Petitioner Buen Realty and Development Corporation, as the new owner of the subj
ect property, wrote a letter to the lessees demanding that the latter vacate the
premises.
August 30, 1991: the RTC ordered the Cu Unjiengs to execute the necessary Deed o
f Sale of the property in litigation in favor of plaintiffs Ang Yu Asuncion, Keh
Tiong and Arthur Go for the consideration of P15 Million pesos in recognition o
f petitioners right of first refusal and that a new Transfer Certificate of Title
be issued in favor of the buyer. The court also set aside the title issued to B
uen Realty Corporation for having been executed in bad faith. On September 22, 1
991, the Judge issued a writ of execution.
The CA reversed the RTC ruling.

Issue: WON Buen Realty can be bound by the writ of execution by virtue of the no
tice of lis pendens, carried over on TCT No. 195816 issued in the name of Buen R
ealty, at the time of the latter s purchase of the property on 15 November 1991 fr
om the Cu Unjiengs. NO
Held:
Right of first refusal is not a perfected contract of sale under Article 1458 of
the Civil Code
In the law on sales, the so-called right of first refusal is an innovative juridic
al relation. Needless to point out, it cannot be deemed a perfected contract of
sale under Article 1458 of the Civil Code.
In a right of first refusal, while the object might be made determinate, the exe
rcise of the right, however, would be dependent not only on the grantor s eventual
intention to enter into a binding juridical relation with another but also on t
erms, including the price, that obviously are yet to be later firmed up. Prior t
hereto, it can at best be so described as merely belonging to a class of prepara
tory juridical relations governed not by contracts (since the essential elements

to establish the vinculum juris would still be indefinite and inconclusive) but
by, among other laws of general application, the pertinent scattered provisions
of the Civil Code on human conduct.
The proper action for violation of the right of first refysal is to file an acti
on for damages and NOT writ of execution
The final judgment in Civil Case No. 87-41058, it must be stressed, has merely a
ccorded a right of first refusal in favor of petitioners (Ang Yu et. al). The cons
equence of such a declaration entails no more than what has heretofore been said
. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the
failure of private respondents to honor the right of first refusal, the remedy
is not a writ of execution on the judgment, since there is none to execute, but
an action for damages in a proper forum for the purpose.
Unconditional mutual promise to buy vs. Accepted unilateral promise
An unconditional mutual promise to buy and sell, as long as the object is made d
eterminate and the price is fixed, can be obligatory on the parties, and complia
nce therewith may accordingly be exacted.
An accepted unilateral promise which specifies the thing to be sold and the pric
e to be paid, when coupled with a valuable consideration distinct and separate f
rom the price, is what may properly be termed a perfected contract of option. Th
is contract is legally binding, and in sales, it conforms with the second paragr
aph of Article 1479 of the Civil Code, viz:
Art. 1479. . . .
An accepted unilateral promise to buy or to sell a determinate thing for a price
certain is binding upon the promissor if the promise is supported by a consider
ation distinct from the price. (1451a)
Observe, however, that the option is not the contract of sale itself. The option
ee has the right, but not the obligation, to buy. Once the option is exercised t
imely, i.e., the offer is accepted before a breach of the option, a bilateral pr
omise to sell and to buy ensues and both parties are then reciprocally bound to
comply with their respective undertakings.
Buen Realty cannot be ousted from the ownership and possession of the property
Furthermore, whether private respondent Buen Realty Development Corporation, the
alleged purchaser of the property, has acted in good faith or bad faith and whe
ther or not it should, in any case, be considered bound to respect the registrat
ion of the lis pendens in Civil Case No. 87-41058 are matters that must be indep
endently addressed in appropriate proceedings. Buen Realty, not having been impl
eaded in Civil Case No. 87-41058, cannot be held subject to the writ of executio
n issued by respondent Judge, let alone ousted from the ownership and possession
of the property, without first being duly afforded its day in court.